Palace backs move to tax online merchants

by RG Cruz, ABS-CBN News

MANILA, Philippines (UPDATED) - The Bureau of Internal Revenue's (BIR) plan to tax online stores is no different from levies placed on ordinary retailers, a Palace official said Friday.

Deputy Presidential spokesperson Abigail Valte said the BIR hopes to collect taxes from internet merchants because their sales are also subject to income and value-added taxes.

Valte clarified that the BIR's plan does not cover people who want to sell pre-owned items on social networking sites.

The plan is intended for sites that "people go to for people to buy things. Everybody has a good idea what these sites are."

Valte said it's a matter of implementing tax laws.

"If you're a seller engaged in retail, you're subject to tax unless you can show the BIR that you're exempted. It doesn't matter, the interpretation of the BIR is they are no different from a merchant who sells wares sa physical stores," she said.

BIR chief Kim Henares earlier said the agency has not monitored taxes paid by online stores despite the growing number of online transactions.

She noted the online selling community is part of the P300 billion informal sector.

Earlier this month, BIR collections surpassed the P1-trillion mark.

This year's tax collection has already increased by 14% compared to last year but the BIR has yet to reach its target goal of P1.66 trillion. - with a report from ANC